GATE Humanities and Social Sciences - Economics Practice Quiz

Question 1

A consumer has utility function $u(x,y)=\min\{2x,y\}$. Prices are $p_x=4$, $p_y=2$, and income is $m=120$. The utility-maximizing bundle is:

Accepted Answer

$(x,y)=(15,30)$

Question 2

In the Solow growth model with production function $Y=K^\alpha (AL)^{1-\alpha}$, population growth rate $n$, technology growth rate $g$, depreciation rate $\delta$, and saving rate $s$, the steady-state condition in terms of capital per effective worker $k=\frac{K}{AL}$ is:

Accepted Answer

$s k^\alpha=(n+g+\delta)k$

Question 3

For a simple random sample, suppose the population regression model is $y_i=\beta_0+\beta_1 x_i+u_i$, and the OLS estimator $\hat{\beta}_1$ is unbiased if:

Accepted Answer

$E(u_i\mid x_i)=0$

Question 4

A monopolist faces inverse demand $P=100-2Q$ and total cost $C(Q)=20Q+100$. The profit-maximizing output and price are:

Accepted Answer

$Q=20,\ P=60$

Question 5

Consider the IS-LM model in a closed economy. If investment is completely interest-inelastic, which of the following is most accurate for the effectiveness of monetary policy?

Accepted Answer

Monetary policy is ineffective because the IS curve is vertical

Practice Quizzes

GATE Humanities and Social Sciences - Economics Practice Quiz